Expanded military retiree tax breaks approved by North Carolina Senate

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RALEIGH, N.C. — Senators want to give a state income tax break to more North Carolina military veterans on retirement pay or benefits received by surviving family members.

The state Senate voted Wednesday to expand how many income tax filers can deduct military pensions or survivorship benefits.

A court settlement during the 1990s already gives that break to retirees who served in the military for at least five years prior to August 1989. Supporters of expanding the deduction say it will make North Carolina more attractive to service members. Such advantages also could favor military installations in eastern North Carolina during the next round of base closings.

The House would still have to approve the tax break, which legislative staff estimate could cost state coffers up to $32 million annually within five years.